News

UK businesses under risk as Greece stands out on the edge of a possible exit from the Euro

As Greece stands on the edge of default and a possible exit from the Euro, British businesses are now beginning to weigh the potential impact of this.

Although Britain’s exports to the country are small at around £920 million per year, the wider impact of Athens leaving the Eurozone would hit the UK’s wider trade relationship with the rest of the region.

The Telegraph has reported that Europe accounts for about half of Britain’s exports and the weakness of the euro has already made it harder for UK manufacturers to compete as the stronger pound has made the value of their goods and services more expensive.[1]

Osborne told MPs:

“Out in the real world there are some serious economic risks, not least the risk that we see growing in Greece of a potential default and exit from the euro. People should not underestimate the damage that that would do to financial confidence.”

“Of course, in the UK we take all steps to prepare for and protect ourselves from such eventualities, but the best thing that a government can do is to ensure that it is living within its means, that it has a productive economy and that its public finances are in good order. That is what we are going to deliver in this parliament.[2]”

Cameron will discuss the Greek crisis when he meets his Italian and Luxembourg counterparts in separate meetings. Italy and Luxembourg are founding members of the euro. The prime minister will meet Matteo Renzi in Milan before flying to Luxembourg for dinner with Xavier Bettel, who takes over the EU’s rotating presidency on 1 July.[3]
[1] Andrew Critchlow, “Nervous UK companies begin to assess impact of Greece exit”, www.telegraph.co.uk
[2] Nicholas Watt, Larry Elliott and Graeme Wearden, “UK starts planning for ‘serious economic risks’ of Greek exit from euro” , www.theguardian.com
[3] ibid